05.16.11

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Microsoft’s CEO More Likely to Leave After His Disastrous Skype Move

Posted in Finance, Microsoft, Steve Ballmer at 9:49 am by Dr. Roy Schestowitz

Summary: Anger within Microsoft and the community of its shareholders is likely to increase pressure on Steve Ballmer, as it already does

SKYPE being bought was a great deal for its developers, but a total waste of money for Microsoft. “Angry Microsoft stock holder admits to a lot of thing we already know about Microsoft in the Free Software community,” says this person to the FSF group, pointing to this piece which was titled “The Ballmer Days Are Over”

I think it is appropriate at this time to start the countdown of how long Ballmer has left until he “steps down”. 1 This Skype deal should be the final nail in the coffin for the Ballmer era at Microsoft, yet I fear that employee number 30 may get a reprieve. Let’s take a stroll down Ballmer memory lane:

$8.5 BILLION

Ballmer’s acquisition of Skype for $8.5 billion dollars is not only a gross overpay, but a complete waste of money for Microsoft. Ballmer has yet to lay out a clear reason why Microsoft wanted Skype. He has only stated the obvious: integration in Microsoft products — which could have been done in a partnership instead of an acquisition. In fact, the acquisition by most accounts sounded more like a move by Ballmer to buy something that others 2 may have wanted to own — just for the sake of others not owning it.

Beyond that is the fact that Microsoft has 89,000 employees — are you telling me that the company that put a computer in every home couldn’t create a Skype clone?

Microsoft employees too are unhappy about this deal. While the company lays off a lot of employees and pays less to the rest (e.g. by offshoring), here we have a major waste of money.

My co-host Tim predicted that Ballmer would leave Microsoft some time around the middle of this year. Is the board about to take action? Ballmer sure hasn’t helped Microsoft’s attempts to paint itself as a friend of “Open Source”. People are already abandoning Skype and using just SIP clients. Earlier today we ran a successful test recording with just free software and getting good results. Our interview with Richard Stallman is coming soon.

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9 Comments

  1. twitter said,

    May 16, 2011 at 2:35 pm

    Gravatar

    So even people at Microsoft tire of the company’s anti-competitive strategy. Coming from an executive, the statement above is a confession of anti-trust. Skype was bought just to keep it from others, that’s a crime. Employees may have like this while Microsoft was paying them instead of firing them.

    The problem is that what employees thing does not matter to Microsoft any more than what customers or shareholders think. Management has complete control and does not care.

    Congratulations on making free software SIP clients work. Please post notes so the rest of us can follow.

  2. NotZed said,

    May 16, 2011 at 9:14 pm

    Gravatar

    As you state later, perhaps about patents. But that’s still an awful lot of money.

    Quite frankly what most surprises me though is how many of the open sauce `community’ are making noise about this. If they are still using skype with all the alternatives they only deserve to be upset.

    One of the links in the last links posts goes on about how forcing their neophyte friends and parents to use ekiga is unacceptable, but they’re missing the point (despite the fact ekiga isn’t any harder to install than skype and only modestly more difficult to setup). Once you use a standard you can use any client, it’s the service you’re using not the client. e.g. all SIP providers have freely downloadable windows or mac clients which can be used with the service just as well as ekiga (for example) can. You don’t all need to use the same front-end.

    twitter Reply:

    Microsoft money is always inflated by use of stock swaps and donations of worthless items, but any money is too much for a company that’s firing its own employees.

    This latest piece of corruption is worth making lots of noise about. The field is artificially restricted by patents and telco deals. Skype had enough of both to be a success and was gnu/linux friendly if not free software. Left to their own devices, the company might have given up and released a free software client with little adverse impact on their service of connecting people to telco providers for a fee. Microsoft has blocked all gnu/friendly options for the company and will probably use the acquisition as an excuse to sue free software alternatives. This is the Microsoft we all know and hate, the destroyer of innovation and retarder of progress.

    Agent_Smith Reply:

    Exactly, Skype has patents, and the FLOSS community is less concerned about the service(ok, it was a so-so service for Linux), and more concerned about the patents Skype brings with it(and can be used to harm even Ekiga, among others)

    Dr. Roy Schestowitz Reply:

    Well, that’s Microsoft for you.

    Dr. Roy Schestowitz Reply:

    Later this month I will publish a survey/review of about half a dozen SIP clients I have been using.

    Agent_Smith Reply:

    Looking forward to it.

  3. TemporalBeing said,

    May 19, 2011 at 12:17 pm

    Gravatar

    Quite frankly I am hoping the EFF, FSF, and others help out by filing with the FTC and DOJ to block Microsoft from buying Skype. I for one simply don’t trust Microsoft to maintain Skype on Android, iOS, or Linux; or for that matter not to port Skype to .Net/Mono and introduce everyone to the various patent traps in Mono as a result.

    Dr. Roy Schestowitz Reply:

    This is very unlikely to happen.

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